The Office of Fair Trading (OFT) has made an astounding U-turn, announcing its intention to refer an investigation into the grocery sector to the Competition Commission six months after declaring that no inquiry was necessary.
The referral, which will see the Competition Commission review the dominance of supermarket chains within the grocery sector, comes after mounting public pressure on the regulator to reverse its initial decision.
Sainsbury’s general counsel Nick Grant told The Lawyer that nothing had changed in the grocery sector since the OFT first rejected calls for an inquiry in August last year.
“We’ve always maintained that UK food retailing is one of the most competitive markets and works in the interests of consumers,” he said. “The OFT states clearly that price, quality, range, choice and service are all working efficiently for consumers and have improved in recent years, so we fail to see why further investigation of these aspects is required.”
Edwin Coe head of litigation David Greene, who is representing the 32,000 shopkeepers from the Association of Convenience Stores, who have complained of anticompetitive practices within the industry, said the OFT had taken too long to make its decision.
“It’s a complete U-turn and it’s basically because they [the OFT] have thought about it,” he said. “It should not have taken two years to get to this point.”
In November last year, OFT chief executive John Fingleton defended the regulator’s initial decision not to intervene in the grocery sector, telling an all-party group of MPs its role was to “protect competition, not competitors”.